Thomas R' Saving

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Thomas R. Saving

• Director of the Private Enterprise Research
  Center at Texas AM University
• A College Students Guide to Social Security
• Wednesday, 10am, Thomas 209

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Chapter 17Medical Care Reform in the United
States
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Whats the problem with healthcare in the United
States?

• Quality
• Access
• Affordability

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The Moral Issues

• Is medical care a right?
• Universal coverage vs Universal access?
• Appropriate level of medical care?
• Economic approach

We hold these truths to be self-evident, that all
men are created equal, that they are endowed by
their Creator with certain unalienable Rights,
that among these are Life, Liberty and the
pursuit of Happiness.
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Goals of Reform

• Social Goals
• National Defense
• Education
• Economic Growth
• Environmental Protection
• Health Care
• Whos covered
• Whats covered
• Who pays and how much

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Health Insurance in the United States

• Employer-based group plans
• Individual insurance
• Government entitlements

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Health Insurance Regulations

• Federal responsibility
• ERISA
• Federal mandates
• States responsibilities
• Health insurance mandates

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Economics of Mandates

• Correct perceived deficiencies in health
  insurance market
• Tendency to undervalue certain types of benefits
• Adverse selection
• Viewed by state policy makers as a low cost way
  of improving access
• Tradeoffs?
• Higher premiums
• Lower wages
• Lower fringes
• Higher unemployment
• More uninsured

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Types of Mandates

• Benefits
• Alcoholism treatment
• Drug abuse treatment
• Oral contraceptives
• Mammography screening
• Prostate cancer screening
• Well-child care
• Providers
• Chiropractors
• Dentists
• Nurse practitioners
• Psychologists

• Persons
• Adopted children
• Newborns
• Handicapped children
• Dependent students
• Processes
• Guaranteed issue
• Exclusions of preexisting conditions
• Premium caps
• Guaranteed renewable

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U.S. Policy Alternatives

• State-level experiments
• Federal involvement
• Market alternatives

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State-level Experiments

• Hawaii
• Mandated employer-based insurance for those
  working more than 20 hours per week
• Fee for service plan through BC-BS
• HMO through Kaiser
• State Health Insurance Program
• Coverage for citizens with income up to 300 FPL
• Oregon http//www.oregon.gov/OHPPR/HSC/current_pr
  ior.shtml
• Extended Medicaid eligibility
• Coverage for citizens with income at or below
  100 of FPL
• Prioritized list of diagnoses/treatments
• Trade-off
• comprehensive coverage for a few vs. greater
  access for the many?

Employees premium limited to 1.5 of monthly
salary
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Federal Proposals

• Single-payer
• Elements
• Basic benefits package
• Private insurance is limited to extras
• Physician fee schedule
• Global hospital budgets
• Economies of scale vs higher tax burden
• Employer mandated insurance
• play or pay
• Individual mandated insurance

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Market Alternatives

• Tax credits or vouchers for low-income families
• Elimination of IRS exemption
• Allow interstate purchase of health insurance
• Creation of health insurance purchasing
  cooperatives
• Medical savings accounts
• High-deductible, catastrophic insurance policy
• MSA used to bank saved premiums and use for
  medical expenses (up to deductible)
• Managed competition
• Employers required to offer competing health
  plans
• Employers pay 80 of Average Plan Cost (tax free)